Allies and opponents support AMI package

Both allies and opponents of the National-led Government are backing its rescue package for insurance company AMI - even though it could cost as much as $1 billion.

The Government is providing AMI Insurance with a back-up financial support of $500 million in case the company does not have enough money to cover all the claims from the Canterbury earthquakes in September and February.

However, the Government will not have to pay a cent if AMI can find a commercial solution to its woes.

AMI has about 85,000 clients in Christchurch, or about 35% of the residential market in the quake-devastated South Island city.

Labour Party finance spokesperson David Cunliffe supports the package for AMI, but will be looking closely to ensure the Government manages it better than it has the retail deposit guarantee scheme which was triggered after the collapse of South Canterbury Finance last year.

ACT Party finance spokesperson Sir Roger Douglas says he also reluctantly supports the AMI package, but only on the basis it should be the last time the Government bails out another business.